EVEN as Thailand begins to climb slowly out of the pit of financial crisis, Indonesia is still grappling with turmoil that appears to have gone out of control.

''We have arrived at a hopeful situation from a hopeless one,'' said a Finance Ministry official. ''I don't think Indonesia will survive this financial crisis. Its banking system is collapsing, and it could take 15 years before it is back on track again.''

Indonesia's chances of recovery are very slim, because creditors are going after its corporates in dead earnest. After selling their goods abroad, the Indonesian corporates will not have a chance to get their money back, because their letters of credit will have been intercepted by the foreign creditors.

''Indonesia can only see a quick dry-up in its liquidity. How can it survive when the creditors keep on biting its flesh?'' added the official.

Although there is still a long way to go, Thailand has indeed decoupled from Indonesia due to its successful implementation of the International Monetary Fund (IM) support programme, though the stock market and the baht wil not return to their pre-crisis levels.

As evidenced in the third letter of intent with the IMF, Thailand has addressed all the key points that the financial markets are focusing on. These range from an agreement with the IMF to back Thailand with additional stand-by credit to defend the baht if needed, the expansionary fiscal programme to cope with the sharp minus growth rate of the Thai economy in the middle of this year, the recapitalisation programme and adoption of internationally accepted rules for the banking system and the transparency and accountability of the Financial Institution Development Fund.

''We have walked the right path, but investors are now watching to see how the government is going to follow through with the programme,'' said Banthoon Lamsam, the president of Thai Farmers Bank Plc. ''I would say that confidence has returned to Thailand 50-50.''

The situation is completely different in Indonesia, which is still under intensive care by the IMF. What is happening in Indonesia will be the world's, if not the United States', most challenging problem, as the livelihood of more than 200 million people is at stake.

Monday US special envoy Walter Mondale arrived in Jakarta for talks with President Suharto on the country's economic crisis. Mondale's visit underlines US concern, in terms of both security and finance, for Southeast Asia's largest nation. That is why he is reported to be accompanied by Assistant Secretary of State for East Asian and Pacific Affairs Stanley Roth and Treasury Undersecretary David Lipton.

Mondale, vice president in the Carter administration, is expected to press Suharto to hasten economic reform as prescribed by the IMF. He will threaten, if Suharto fails to strictly follow through with the IMF support programme, to block the release of bail-out funds from the IMF's coffers.

So far Indonesia can only draw US$3 billion from the bail-out package of $43 billion. Support money from other contributors is not forthcoming. An earlier pledge by the Singaporean and Japanese monetary authorities to jointly defend the rupiah has been put on hold following Indonesia's trouble with the IMF programme.

Indonesia's problems stem from several fronts.

First, it committed a mistake by rushing to float the currency on the heels of the baht instead of trying to bring the rupiah down on a soft landing, according to the assessment of a senior Asean leader.

Second, Indonesia only sought to protect the bank accounts of small-time depositors when it closed down 16 banks, leaving the big-time depositors to take their own risks. This caused further panic and a liquidity run.

Third, Indonesia is facing the greatest uncertainty vis-a-vis the president, which has turned off foreign investors. The only route left for Indonesia's survival is for the country to get a new leader widely accepted by the international community, the senior Asean leader was quoted as saying.

Chuan returned to Bangkok Monday having pledged, apart from moral support, to donate 5,000 tonnes of rice to Indonesia.

The Thai leadership, he said, will never forget Indonesia's generosity in August when, already in difficult circumstances, it pledged to pitch in $500 million in stand-by credit support for Thailand in conjunction with the IMF programme.

Suharto appears to have backed down from his earlier determined push to introduce a currency-board regime to defend the rupiah. ''Suharto is known for his willingness to play a dangerous game in order to achieve a bargaining purpose,'' said a Thai regulatory official.

Still, this dangerous game appears to have led the Indonesian leader nowhere. The Finance Ministry source said that it was Singaporean Prime Minister Goh Chok Tong who had called US President Bill Clinton about two weeks ago and urged him to talk Suharto into dropping the idea of embracing the currency-board system, under which the rupiah would be tightly pegged to the US dollar, impossible for Indonesia to implement because it has no foreign-exchange reserves left and its banking system is falling apart.

''In a currency-board system, you must have either a very strong banking system or a non-banking system, because the interest rates will be fluctuating sharply,'' said the Finance Ministry source.

''Hong Kong can effectively operate a currency board because its banks can quickly adjust to the sharp interest-rate movements while the currency is pegged rigidly to the dollar; in Argentina there is no banking system: banks act only as a conduit for money transfer.''

The source said a country needed more than a heart of stone to adopt the currency-board regime, which he likened to tying one's hands and enduring the fire below.